Starting Your Second Business

Some people who find success being entrepreneurs eventually get to a point where they start considering a second business venture. While it can be hard to know whether a second business is ever a good decision, there are a few signs to help you determine whether now is a good time to move forward.

The two main reasons for starting a second business is that you’ve either identified another need in the marketplace that you want to fill, or you want to expand on an existing idea through diversification. Either way, it’s important to first do your research about any existing patents and competition before donating your hard-earned time and money towards a cause. Be cautious about people approaching you about the “next great thing”, since established business owners can be a potential target for scams.

After you finish your exploratory phase, the next way to tell if you’re ready to begin a second startup is to assess whether you can keep your existing business going successfully while devoting plenty of time to the new one. You will need to have a trusted successor to take the reigns once you relinquish the majority of your time over to your new venture. If you feel like you’ve found a suitable candidate, that’s a strong indicator that you might be ready to proceed.

Speaking of time, you will need to ensure you have support from your family. Since your existing business has no doubt already taken up a substantial portion of your time, it’s important to check with your family about the time commitment involved in starting a new adventure. Fortunately, since you know first-hand how hard a startup can be, you can give a pretty fair assessment this time around about your obligations. Another advantage to being a seasoned entrepreneur is knowing that you don’t have to do things alone this time around. You have the resources and the time to form a support team to help build a second business, and you can learn from the mistakes you made previously.

In order to keep your first business separate and free from any potential future lawsuits as well as any number of unforeseen circumstances, you will need to legally set up the new corporation as a completely separate entity. In addition to establishing your business legally for tax purposes, you should also create separate bank accounts and use different accounting software to make sure the two businesses never overlap financially or legally.